PayPal Negative Balance

GolfR12

Hi guys,

New to the forum and would really appreciate some help. I will try keep this as short possible.

I came across an Instagram account which listed some health and beauty products that I was interested in purchasing to re-sell in the UK. The ‘seller’ referred me to their website (USA based); however, the payment system was down. The ‘seller’ advised they are working to get this resolved but I can make a payment using PayPal Gift so they avoid incurring fees. I’ve always thought PayPal was a legitimate payment platform and I would be covered should anything go wrong so never thought anything of this. After I made two separate payments totalling $900 (£730), the seller cut off all contact with me, not answering my calls, emails and also blocked me on the instagram account. It was clear within a few days that I had been scammed!

I raised this with PayPal who advised PayPal Gift payments are not covered at all. This is something that I was unaware of at the time. The second PayPal advisor who messaged me advised me to raise it with my bank and they will help me get my money back. My bank raised a direct debit indemnity and refunded my money to my account; however, PayPal are now showing a negative balance of £730. I have been back and forth with PayPal with no luck.

My question is do I have a leg to stand on here? I don’t want to pay £730 for items that I have not received. However, I do not want this to affect my credit rating in any way. PayPal have advised that my account will be restricted and it will be passed on to a Debt Collection Agency.

Any advice would be highly appreciated.

marliepanda

Paypal gift is for gifting people money, not for goods and services.

Why would you think there would be two types?

Who DO you think should pay for these charges?

BorisThomson

I'm wondering why the bank raised a DD indemnity when there was no DD involved. Are you sure it wasn't a chargeback? Even then I don't believe the refund was correct, as you did not pay directly for goods, you sent an amount of money for no particular purpose.

I would expect either the bank to reverse their decision once PP has disputed it, or PP to pass your debt to a collection agency.

Shakin_Steve

Not every scam covered by a bank or financial institution and, therefore, you are expected to do your homework too. When a seller advises you to use something like PayPal gift, alarm bells should start ringing. The very name of this method of payment should tell you what it’s proper use is.
I’m very sorry, but I think this one is down to you. You instructed PayPal to forward the money, through an instrument which should not have been used, why should they reimburse you?

tempus_fugit

Presumably PayPal did not get the funds from your bank so you are now £730 up in the bank account. This money should be used to pay PayPal and reset the balance there back to zero. Unless I have got this wrong, that would put you back into the position you were in before it happened and you are not paying for goods you didn't receive.

Shakin_Steve

tempus_fugit wrote: »

Presumably PayPal did not get the funds from your bank so you are now £730 up in the bank account. This money should be used to pay PayPal and reset the balance there back to zero. Unless I have got this wrong, that would put you back into the position you were in before it happened and you are not paying for goods you didn't receive.

That’s not how I read it. I think the bank have charged back the money they paid to PayPal, it already having been forwarded and, no doubt, withdrawn, by the seller.

GolfR12

I have not used PayPal before to make direct transfers, only used it to make payments through sites like eBay etc. The seller advised to make the payments as a gift to avoid them incurring a $50 fee and I just didn’t think much of it at the time as the seller had paypal as one of their payment options on the site and I genuinely thought all PayPal transactions were covered. Yes I guess this was negligence on my behalf and I probably should have looked into further.

I really do not want to pay £700 odd for absolutely nothing.

My question is can this be reported to credit file agencies if I don’t pay?

Shakin_Steve

The bank could reverse the chargeback once they hear PayPal’s side of the story, so you’ll lose the money from your bank account anyway.

marliepanda

GolfR12 wrote: »

I have not used PayPal before to make direct transfers, only used it to make payments through sites like eBay etc. The seller advised to make the payments as a gift to avoid them incurring a $50 fee and I just didn’t think much of it at the time as the seller had paypal as one of their payment options on the site and I genuinely thought all PayPal transactions were covered. Yes I guess this was negligence on my behalf and I probably should have looked into further.

I really do not want to pay £700 odd for absolutely nothing.

My question is can this be reported to credit file agencies if I don’t pay?

Yes. It’s a debt!

You paid someone dodgy using a method which offers no protection. That is your fault. You tried to avoid fees (under instruction of the seller) and used an unsafe method.

I asked before but you didn’t answer. Who do YOU think should pay for your mistake, you, PayPal or your bank? Two of the parties did exactly what they were asked to do, and one party was negligent and didn’t use the raft of info or safe payment options available.

This is no different to you handing a random stranger £700 in the Street then blaming the cash machine that dispensed it to you.

Arleen

GolfR12 wrote: »

I have not used PayPal before to make direct transfers, only used it to make payments through sites like eBay etc. The seller advised to make the payments as a gift to avoid them incurring a $50 fee and I just didn’t think much of it at the time as the seller had paypal as one of their payment options on the site and I genuinely thought all PayPal transactions were covered. Yes I guess this was negligence on my behalf and I probably should have looked into further.

I really do not want to pay £700 odd for absolutely nothing.

My question is can this be reported to credit file agencies if I don’t pay?

In reality you are out of that money. If you feel really vengeful, you will have to sue the person you've sent the money for, and since they are in different country, well, good luck with that. And even if you manage to get a judgement against the scammer, you won't ever manage to collect on it.

GolfR12

Ok thank you for all your advice